Liberty Mutual's second-quarter loss widens on cat claims
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Liberty Mutual Holding Co. reported a net loss of $585 million for the second quarter, compared with a $343 million loss in the same period last year, as natural catastrophe claims mounted.
“Challenging market conditions in the personal lines industry have persisted, including severe wind and hail events in Texas, Oklahoma and Colorado and continued monetary inflation and legal system abuse,” CEO Tim Sweeney said in a call with analysts on Thursday.
Inflationary pressures, mainly in the auto and property lines, “have not eased to the degree we anticipated,” Mr. Sweeney said, noting a need to be “more selective in our underwriting and to achieve the necessary rates to combat these elevated loss trends and achieve target profitability.”
Liberty Mutual’s combined ratio for the quarter worsened to 109.4% from 105.6% in the prior year quarter. The largest driver behind the increase was catastrophe losses, Mr. Sweeney said.
Total net written premium for the quarter was $11.8 million, slightly up from the prior year period, as rate increases were offset by exposure reductions, Mr. Sweeney said.
Mr. Sweeney said the quarter saw net investment income of $797 million, down from $938 million in the prior year quarter.
The decrease was attributed to lower returns from limited partnership investments, primarily in the private capital sector. Limited partnership income fell $107 million in the quarter, down from $468 million in the prior year quarter.
Mr. Sweeney said the insurer continues to navigate a challenging market environment, “but are looking forward to capitalizing on new opportunities in the future.”
